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certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all classes of the community. Such law would impose a real tax upon the whole country, not in favour of that particular class of workmen who were injured, but of some other class **.

Thus, of all the motives which may induce a nation to prohibit the importation of the produce of other countries, there is but one that is reasonable and just, because it is necessary; I mean when the government of our own country is so defective, that none of our home-productions can stand a competition with foreign productions even in the home-market; when natioral industry is not capable of being stimulated by the rivalship of foreign industry; and when the people, being discouraged and debased, abandon themselves to sloth and misery. Except this case, foreign commerce or general circulation is beneficial, useful, and profitable to all, and contributes, if not with equal, at least with certain success, to the progress of public and private wealth.

* The author says:

- cutrement c'est imposer une ture sur lout le pas en faveur de la classe d'ouvriers qui fournit les produils prohibés ;' which is perfectly correct: but Idam Smith shews particularly, that the workmen who sutier by our ncigli. bour's prohibition are not benefited by ours, which is the main point of the question. (Vealth of Tacions, 1805, vol. ij. lookir. chap. 2, pages 207.-210.)-it is this point lihich the framers of the famous English Orders in Council, by which it was intended to retaliate upon France, appear not to hare anticies!!! cousidered - T.

CHAP. II.

Of the influence of Money and Credit upon the Cir

culation of the Produce of Labour.

As soon as mankind discovered that commodities have no value but what is determined by their being exchanged, they must easily have perceived that this value is always in proportion to the extent of the competition ; that is to say, that the more a produce is sought for, the more is its exchangeable value enhanced : of course, every producer would carry his productions to the place where the competition was the most considerable, and consequently the market of the borough must have been preferred to the villagemarket, that of the town to the borough's, that of the capital to the town's, and that of great fairs and staple cities to the market of capitals.

This direction of the circulation of the produce of labour is visibly the work of commerce; and it is exclusively to merchants that we are indebted for the benefits which it diffuses.

The interest of the producers and traders would, however, have been but imperfectly consulted, if on the most advantageous spot for their exchanges they should have been unable to procure the commodities they wanted otherwise than by the actual interchange of raw and manufactured produce. How many exchanges would they liave been obliged to make before the grower of a quarter of corn could have obtained a dozen of stockings or a pair of boots, or before the corn-merchant could have exchanged his stock of wheat for the commodities he wanted! What toils, what trouble must they have undergone, how much time must they have lost, before they could accomplish an operation so simple and so easy!

How was this operation discovered ? how was the material or actual exchange of produce avoided, and yet its reciprocal value fixed, as if the exchange had been effected with material produce?

Adam Smith supposes, that after the first establishment of the division of labour, every prudent man, in every period of society, must naturally have endeavoured to manage his affairs in such a manner as to have at all times by him, besides the peculiar produce of his own industry, a certain quantity of some one commodity or other, such as he imagined few people would be likely to refuse in exchange for the produce of their industry ; that many different commodities were at different times employed for this purpose. In the first ages of Greece, cattle was thus employed ; in Abyssinia, salt; in some parts of the coast of India, a species of shells ; dried cod, at Newfoundland; tobacco, in Virginia ; sugar, in some of the West-India islands; and hides, or dressed leather, in some other countries. *

. It evidently follows from these facts, that, in the very first stages of civilization, men determined the exchangeable value of the produce of their labour,

* Wealth of Nations, vol. i. book i. chap. iv, page 36.

not by comparing it with the commodities offered to them in exchange, but by comparing it with a preferred produce. Thus the owner of a quarter of corn did not say: 'My quarter of corn is worth the dozen of stockings, or the pair of boots that I am offered for it: but' it is worth so much of the preferred commodity, as will get me a dozen of stockings, or a pair of boots.'-This new mode of exchanging simplifies the operation, and yet leads to the same results.

Had matters continued in this primitive simplicity, the nature of the preferred commodity and its functions in exchanges would never have been mistaken, and the numberless and fatal errors of the monetary system would have been avoided.

But merchants having succeeded in making all civilized nations receive gold and silver as the preferred produce, it became necessary to fix the exchangeable value of the precious metals, to divide them in portions proportioned to the wants of commerce, and to assign to each portion a value strictly proportioned to the totality of the value assigned to a certain mass of gold and silver.

This operation appeared impossible, not only on account of the exchangeable value of gold and silver, being liable to fluctuate like all other values, but also from the difficulty of giving to the coined metals a numeric value and an invariable tineness always equivalent to their intrinsic value.

This second impossibility has been officially and solemnly recognised at a period not very remote from

our time.

In 1788, the French government consulted the Royal Academy of Sciences, to know whether it was possible to give to coined metals a monetary value and an invariable fineness always equivalent to their intrinsic value. Five academicians *, who were named commissioners for this purpose, demonstrated by different experiences, that it was not possible to fix with strict accuracy the relation of two representative and intrinsic values, both because it is impossible to determine the quantity of alloy to be added to the precious metals for the purpose of giving the coin that resistance and incorruptibility which form one of its essential properties, and because it is extremely difficult to render perfectly homogeneous a mixture of metals which prevents the precise quantity of each being ascertained, as the alteration which the action of the fire may produce upon them cannot be foreseen

This defect, peculiar to the converting of goid and silver into money, was, however, neither the most disagreeable nor the most prejudicial to the general circulation of commodities. An enlightened government might wish to make it disappear, and to give its coin the highest attainable degree of perfection : but this praiseworthy attempt could not remedy the original defect inherent in metallic money; that is, it could not confer upon gold and silver coin a positive and absolute cxchangeable value, when that value is and can be but relative to the demand for coin and to the quantity in circulation. It is this defect which

* Borde, Condorect, La Grange, Lavoisier, and Tillet. + IIistoire de l'Académie des Sciences, année 1785.

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